Now What? pondering the housing possibilities of a bc coalition

Pondering the Housing Possibilities of a BC CoalitionWith our government hanging in the balance and a coalition government highly possible, what would that mean for real estate taxes?

The bizarre state of affairs post-BC election, with the Liberals hanging onto a minority that could flip one way or another in the next few weeks, is unfamiliar territory for most British Columbians. But for me, as a recovering Brit, I’ve seen hung parliaments before. And believe me, it can get pretty messy.

With the Liberals hanging on – for now at least – to a minority government, one of a number of things could happen in the next few weeks. After the absentee ballots have been counted, the Liberals could get another seat (the NDP having won one seat by just nine votes), giving the incumbents the majority they need – and then it’s business as usual.

But if the results stay the same, one of two things could occur – the Liberals could rule with a minority government, but only if the party retains the confidence of the House, which is by no means certain. Alternatively, the power lies – unexpectedly – with the Green Party, which could be drawn by either the Liberals or the NDP to join forces and create a coalition or formal agreement to create a majority government.

So what, then, would happen to housing policy, if the Greens were to be in a position to make policy demands in exchange for working with either party? There’s no way of knowing, but it’s certainly an interesting question to ponder.

Let’s imagine first, a Green/Liberal coalition. A number of their policies are distinctly at odds, and certainly, their respective positions on the foreign buyer tax do not jive at all well. While the Liberals have introduced a 15 per cent tax for Metro Vancouver, the Greens want to expand that across the whole of BC and hike it up to a whopping 30 per cent. It’s almost impossible to imagine Christy Clark and Mike de Jong being on board with such a drastic increase to the tax, especially given that the Liberals recently softened it to exempt foreign nationals with work permits. Indeed, there has been widespread speculation that the Liberals might reduce it again after being re-elected, now that it has been seen to do the job it set out to do.

Added to that, the speculation tax proposed by the Greens, on capital gains of $750K+ made on all homes owned for less than five years, is another policy likely to be rejected by the Liberals. With supporters that tend towards the higher end of the wealth spectrum, therefore people who might easily make that kind of money on the sale of a home, the Liberals won’t want to ruffle feathers there. But there might be room for negotiation on that policy. Similarly, the Greens’ sliding-scale luxury home Property Transfer Tax, going up to 12 per cent for homes over $3 million, would likely need some considerable softening for it to be palatable to the Liberals.

So what about an NDP/Green government? Certainly, many of those two parties’ policies, including housing, are a somewhat better fit. Like the Liberals, the NDP would likely balk at the Greens’ proposed BC-wide foreign buyer tax, conscious of the damage it could do to some of the province’s smaller, resource-rich centres. But perhaps the Greens would be satisfied instead with the NDP’s proposed two per cent annual property tax on owners of Metro Vancouver homes who do not pay Canadian income taxes (with many exemptions). Maybe the two parties would even meet halfway and take that tax province-wide instead.

The NDP would be much more likely than the Liberals to entertain the Green Party’s speculation and luxury home tax proposals and garner further support from the lower- to middle-income earners of the province, which are the NDP’s bread and butter.

Either way, coalition governments can occasionally work well – and can be disastrous. You only have to look at what happened to the UK’s third party, the Liberal Democrats, when it joined forces with the Conservative minority government to create a majority coalition. Some of the policy promises made by the Conservatives in the deal were kept, some were not – and the Liberal Democrat leader ended up taking the political beating of his life.

Andrew Weaver, choose your allies carefully.

This representation is based in whole or in part on data generated by the Chilliwack & District Real Estate Board, Fraser Valley Real Estate Board or Real Estate Board of Greater Vancouver which assumes no responsibility for its accuracy - Listing data updated on May 25, 2019.